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| 18 February 2004 | Wednesday | 26 Zilhaj 1424 |
More WB funds for social sector sought: Poverty reduction strategy to be discussed
ISLAMABAD, Feb 17: Pakistan is seeking increased soft-term funding programmes from the World Bank for its social sector development so as to achieve higher growth and poverty reduction targets.
Informed sources told Dawn that enhanced funding requirements under the poverty reduction strategy paper (PRSP) would be discussed with Vice-President of the World Bank (South Asia) Praful Patel who arrives here on Thursday on a two-day visit.
During his visit, Mr Patel will meet senior government officials who will apprise him of the government's development priorities, a World Bank announcement said.
The discussions will focus on areas critical to maintaining and increasing growth and reducing poverty in accordance with the poverty reduction strategy paper, recently finalized by the finance ministry.
The PRSP is based on the five pillars of (i) accelerating economic growth while maintaining macroeconomic stability, (ii) investing in human capital, (iii) augmenting targeted interventions, (iv) expanding social safety nets, and (v) improving governance.
Under the PRSP, the government has focused its target on raising its social and poverty reducing budgetary expenditures by 0.2 per cent of the GDP per annum starting with financial year 2001-02.
The government plans to prepay around $4.5 billion expensive foreign debts by the year 2007-08 to reduce future debt-servicing costs and create a fiscal space for increased spending on social sector and infrastructure development, says the poverty reduction strategy paper. This will, however, significantly increase the total public debt. The total public debt (including both the domestic and external) has been estimated to increase from Rs3.625 trillion in 2002-03 to Rs3.759 trillion in 2003-04 and further to Rs4.421 trillion by the year 2008.
In terms of GDP percentage, however, the total public debt is estimated to come down from the current level of 90.2 per cent to 66 per cent of the GDP by 2007-08, the PRSP adds.
While the inflation has been projected to remain static at four per cent during the period up to 2007-08, the national savings are estimated to stage a decline. National savings would reduce from 20 per cent of the GDP during the current year to 19.5 per cent next year and finally touch the 18 per cent level by 2007-08.
The real GDP growth rate has been estimated to go up to 5.8 per cent next year and then reach 6.2 per cent by year 2007-8. The GDP growth rate is based on projections that agriculture production would increase to 4.3 per cent next year and further to 4.5 per cent in 2007-08.
Production in the manufacturing sector would increase from 7.8 per cent during the current year but remain static at 7.6 per cent during the next three years before touching the 7.9 per cent mark by 2007-08.
While the small-scale manufacturing has been projected to remain static at 5.3 per cent during the five-year period, the large-scale manufacturing is expected to grow to 8.8 per cent by the year 2007-08. The total investment is expected to increase from 16.5 per cent during the current year to 18.5 per cent by the year 2007-08.
The total tax revenue has been projected to increase to Rs671 billion by the year 2004-05, around 13.8 per cent of the GDP and then go up to Rs851.7 billion or 14.2 per cent in 2006 and further to Rs970 billion by 2007 or 14.5 per cent of GDP.
The public sector development programme (PSDP) has been projected to increase from current year's Rs160 billion or 3.6 per cent of GDP to Rs200 billion or 4.1 per cent of the GDP next year and further to Rs367.5 billion or 5.5 per cent of the GDP by the year 2007-08.
The fiscal deficit has been projected to increase from Rs179 billion during the current year to Rs233.4 billion by the year 2007-08. As percentage of GDP, however, the fiscal deficit would come down from current year's four per cent to 3.5 per cent by the year 2007-08.
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